Psychedelic drug research has seen its share of setbacks, and no classic psychedelic has won an FDA approval to date. But Eli Lilly’s July deal to acquire AtaiBeckley, worth up to $3.8 billion, signaled that pharma is taking psychedelic candidates more seriously as they move deeper in the clinic.
While the Lilly deal, which is expected to close in the third quarter, could help buoy interest in psychedelics, it won’t necessarily trigger a flood of similar deals according to one analyst, simply because there aren’t many big companies actively pursuing neuro indications.
That said, the psychedelics companies that could become appealing targets would share several traits, according to Emma Wille, a senior analyst at Norstella's Citeline. For one, these biotechs would need data that goes beyond proof of concept.
“While the value of positive data seems obvious, there has been a trend in recent years where CNS acquisitions have shifted slightly later in the development process,” she said in an email. “Positive phase 2 data are often a turning point for smaller companies looking for partners or buyers, and this is mirrored in the psychedelic space.”
This may be one of the reasons AtaiBeckley caught Lilly’s eye. The lead asset Lilly would gain in the deal, BPL-003, is a synthetic formulation of 5-MeO-DMT, a psychedelic also found naturally in secretions from the Sonoran Desert toad that is being tested in treatment-resistant depression. It’s one of several drugs that AtaiBeckley is testing to restore connections between synapses in the brain and to support the growth of new ones.
This is a unique approach, according to Lilly, and distinct from conventional antidepressants that typically target neurotransmitter levels. In a phase 2b study, BPL-003 produced rapid reductions in depressive symptoms, with lasting power up to eight weeks. The FDA eventually granted it breakthrough designation, and AtaiBeckley has marched into phase 3 trial activity.
AtaiBeckley released its phase 2b BPL-003 data in July 2025 and open-label extension data in November 2025, which demonstrated the drug’s durability, Wille said. A year later, the company was ready to announce its deal with Lilly.
Similarly, AbbVie’s deal to acquire the rights to Gilgamesh Pharmaceuticals’ psychedelic compound, bretisilocin, followed the release of positive topline phase 2 results.
“This is advantageous for both parties: The acquirer makes a less risky investment and is typically better positioned than the original owner to fund pivotal trials, navigate the regulatory submission, and support commercial launch,” Wille said.
Companies on the hunt for psychedelic assets will also be looking at how the treatment is administered because the new candidates can require a high level of clinical support.
“J&J's [esketamine spray] Spravato was the first psychedelic (albeit not a classic psychedelic) to enter the psychiatry market in 2019,” Wille said. “Because it requires clinic administration and at least two hours of monitoring, uptake was slow as providers had to design and build the infrastructure to support repeated two- or three-hour treatments.”
Drugs that require a shorter monitoring time and that have a clearer launch strategy may be more appealing to larger pharma partners, Wille said. AtaiBeckley says BPL-003 requires an in-clinic visit that takes just about two hours on average — but with no need for clinical involvement like in-session psychotherapy. If approved, the therapy would also launch into a healthcare landscape that’s been primed to administer psychedelic drugs by the rollout of Spravato, which is now a blockbuster.
Several psychedelic biotechs hold potential as acquisition targets. Here are three companies with characteristics that could make them attractive to larger drugmakers.
Compass Pathways
On the one hand, Compass Pathways does have a treatment that requires a high level of clinical involvement for administration. Patients taking its COMP360 depression drug, a synthetic psilocybin derivative, experience psychedelic effects while accompanied by trained support providers offering “non-directive monitoring and support,” according to the company.
On the other hand, Compass has long been considered a leader in the space with one of the most advanced psychedelic compounds in the clinic, which could ultimately prove to be a bellwether for other companies.
Now, the London-based biotech is nearing the finish line with COMP360, for treatment-resistant depression. A rolling NDA submission and initial FDA review are already underway, and Compass expects to complete the application in the fourth quarter. If all goes well, it could be under FDA review by the end of the year, putting it on track to potentially become the first true psychedelic treatments to reach the U.S. market.
Its application is bolstered by two phase 3 studies showing the drug reduced symptom severity in patients with this type of hard-to-treat form of depression. In the second trial, patients taking the highest dose of the treatment (two 25-mg doses) saw a significant drop in symptom severity on the standardized MADRS depression measurement scale. At week six, 39% of patients in that 25-mg dose group had at least a 25% ”clinically meaningful” reduction on the depression measurements scale.
The drug does have a disadvantage in that it produces longer acute experiences during treatment, according to Wille. The treatment’s need for psychological support could also be a turnoff to pharma partners.
“It creates a distinct commercial challenge in that the treatment relies on both therapists and medical providers,” Wille said. “There is the initial burden of training therapists … and then these therapists will not only need to be present on dosing day, but they will also need to conduct preparatory and integration sessions.”
Even so, some analysts believe the drug could be poised for market success. Ritu Baral, an analyst at TD Cowen, wrote in a note to clients that it’s likely the drug will gain approval and see “robust market uptake” thanks, in part, to a “feasible” risk-mitigation strategy.
GH Research
Ireland-based GH Research is also making a name for itself in the psychedelics space with GH001, which, like BPL-003, is an inhaled synthetic formulation of 5-MeO-DMT. In a phase 2 trial, 57.5% of patients with TRD achieved remission on day 8 compared with 0% of the placebo group, according to peer-reviewed results published in JAMA Psychiatry.
The trial met both its primary and all key secondary endpoints. Furthermore, no severe or serious adverse events were reported during the placebo-controlled portion of the trial.
In addition, 77.8% of patients who completed an open-label extension were in remission at a six-month visit with what the company called “infrequent treatments.” In a later update, the company said 73% of patients were in remission at six months after about four treatments on average.
GH001’s shorter duration of action and monitoring requirements could allow it to fit into the existing Sparvato treatment infrastructure, Wille said.
Definium Therapeutics
Definium Therapeutics, formerly MindMed, got a big boost in June when the phase 3 study for its oral LSD-based drug DT120 ODT met its primary and all key secondary efficacy endpoints in major depressive disorder with a performance that some analysts called a “best case scenario” for the company. Analysts lauded the drug for its fast action, durable results and favorable safety profile.
The drug, like COMP360, produces longer acute experiences, Wille noted, which may require additional infrastructure. But Definium’s trial protocol does not include psychotherapy and participants in the Emerge trial met the criteria to leave the clinic after an average of just 5.8 hours.
The drug is also in phase 3 for generalized anxiety disorder. Definium plans to start a phase 3 study in post-traumatic stress disorder in 2027 and is exploring additional, unspecified indications
